Title 13, Decedents' Estates, Guardianships, Transfers, Trusts, and Health Care Decisions

(a) A trustee may petition the court to approve the conversion to a unitrust if (1) a beneficiary timely objects to the conversion to a unitrust; (2) there is not a sui juris beneficiary who is currently eligible under AS 13.38.300(2)(A) or who would be eligible under AS 13.38.30…

In deciding whether to exercise the power conferred by AS 13.38.300, a trustee may consider, among other things, (1) the size of the trust; (2) the nature and estimated duration of the trust; (3) the liquidity and distribution requirements of the trust; (4) the need for regular d…

(a) After a trust is converted to a unitrust, the trustee shall (1) follow an investment policy seeking a total return for the investments held by the trust, whether the return is to be derived from (A) appreciation of capital; (B) earnings and distributions from capital; or (C) …

The trustee may, in the trustee's discretion, from time to time, determine (1) the effective date of a conversion to a unitrust; (2) the provisions for prorating a unitrust distribution for a short year in which a beneficiary's right to payments commences or ceases; (3) the frequ…

(a) Expenses that would be deducted from income if the trust were not a unitrust may not be deducted from the unitrust distribution. (b) Unless otherwise provided by the governing instrument, a unitrust distribution shall be considered to have been paid from net income as net inc…

The trustee or, if the trustee declines to petition the court, a beneficiary may petition the court to provide for a distribution of net income, as would be determined if the unitrust were not a unitrust, in excess of the unitrust distribution if the distribution is necessary to …

A conversion to a unitrust does not affect a provision in the governing instrument directing or authorizing the trustee to distribute principal or authorizing a beneficiary to withdraw a portion or all of the principal.

(a) A trustee may not convert a trust into a unitrust if (1) payment of the unitrust distribution would change the amount payable to a beneficiary as a fixed annuity or a fixed fraction of the value of the trust assets; (2) the unitrust distribution would be made from an amount t…

(a) If AS 13.38.380(a)(3), (4), or (6) applies to a trustee and there is more than one trustee, a co-trustee to whom the provision does not apply may convert the trust, unless the exercise of the power by the remaining trustee is prohibited by the governing instrument. (b) If AS …

A trustee may reconvert a trust that has been converted into a unitrust under AS 13.38.300 by following the same procedures provided in AS 13.38.300 — 13.38.435 for converting a trust into a unitrust. If a unitrust is reconverted under this section, the trustee's power to adjust …

(a) A trustee may release the power conferred by AS 13.38.300 to convert to a unitrust if the trustee (1) is uncertain about whether possessing or exercising the power will cause a result described in AS 13.38.380(a)(3), (4), or (5); or (2) determines that possessing or exercisin…

(a) This section applies to a trust that, by its governing instrument, requires the distribution, at least annually, of a unitrust amount. (b) The trustee of an express total return unitrust may determine the unitrust amount by reference to the net fair market value of the unitru…

Unless prohibited by the unitrust's governing instrument or specifically addressed by AS 13.38.350 or 13.38.420, the trustee of a unitrust may treat gains from the sale of capital assets of the unitrust as part of a distribution of principal to a beneficiary, and, if the trustee …

In AS 13.38.300 — 13.38.435, (1) “smoothing period” means the period of years over which the fair market value of the assets of a unitrust are averaged; (2) “unitrust percentage” means the unitrust percentage established under AS 13.38.330(d).

The trustee of a trust held exclusively for charitable purposes may elect to be governed by AS 13.38.440 — 13.38.490 unless the governing instrument expressly provides that the election provided by AS 13.38.440 — 13.38.490 is not available.

To make an election under AS 13.38.440 — 13.38.490, the trustee shall adopt and follow an investment policy seeking a total return for the investments held by the trust, whether the return is to be derived from appreciation of capital or earnings and distributions with respect to…

(a) After a trustee has elected under AS 13.38.440 for the trust to be governed by AS 13.38.440 — 13.38.490, the trustee shall, in a writing maintained as part of the permanent records of the trust, select the percentage of the value of the trust that will be considered income an…

The trustee may revoke an election to be governed by AS 13.38.440 — 13.38.490 if the revocation is made as part of an alternative investment policy seeking the long-term preservation of the real value of the principal of the trust. The revocation and alternative investment policy…

For the purposes of applying AS 13.38.440 — 13.38.490, the value of the trust is the fair market value of the cash and other assets held by the trustee with respect to the trust, whether these assets would be considered income or principal under the other provisions of this chapt…

In AS 13.38.440 — 13.38.490, except as otherwise expressly stated in AS 13.38.440 — 13.38.490, (1) “income” means the percentage of the value of the trust computed under AS 13.38.440 — 13.38.490; (2) “principal” means all assets other than those identified as income in (1) of thi…

After a decedent dies in the case of an estate, or after an income interest in a trust ends, a fiduciary (1) of an estate or of a terminating income interest shall determine the amount of net income and net principal receipts received from property specifically given to a benefic…

(a) Each beneficiary described in AS 13.38.500(4) is entitled to receive a portion of the net income equal to the beneficiary's fractional interest in undistributed principal assets, using values as of the distribution date. If a fiduciary makes more than one distribution of asse…

(a) An income beneficiary is entitled to net income from the date on which the income interest begins. An income interest begins (1) on the date specified in the governing instrument; or (2) if a date is not specified, on the date an asset becomes subject to a trust or successive…

(a) Unless AS 13.38.500(1) applies, a trustee shall allocate an income receipt or disbursement to principal if its due date occurs before (1) a decedent dies, in the case of an estate; or (2) an income interest begins, in the case of a trust or successive income interest. (b) A t…

(a) When a mandatory income interest ends, the trustee shall pay to a mandatory income beneficiary who survives that date, or the estate of a deceased mandatory income beneficiary whose death causes the interest to end, the beneficiary's share of the undistributed income that is …

(a) Except as otherwise provided in this section, a trustee shall allocate to income money received from an entity, including reinvested cash dividends. (b) A trustee shall allocate the following receipts from an entity to principal: (1) property other than money excluding reinve…

(a) A trustee shall allocate to income an amount received as a distribution of income from a trust or an estate in which the trust has an interest other than a purchased interest. (b) A trustee shall allocate to principal an amount received as a distribution of principal from a t…

(a) If a trustee that conducts a business or other activity determines that it is in the best interest of all the beneficiaries to account separately for the business or other activity instead of accounting for it as part of the trust's general accounting records, the trustee may…

A trustee shall allocate to principal any of the following: (1) to the extent not allocated to income under this chapter, assets received from (A) a transferor during the transferor's lifetime; (B) a decedent's estate; (C) a trust with a terminating income interest; or (D) a payo…

(a) To the extent that a trustee accounts for receipts from rental property under this section, the trustee shall allocate an amount received as rent of real or personal property to income, including an amount received for cancellation or renewal of a lease. (b) An amount receive…

(a) An amount received as interest, whether determined at a fixed, variable, or floating rate, on an obligation to pay money to the trustee, including an amount received as consideration for prepaying principal, shall be allocated to income without any provision for amortization …

(a) Except as otherwise provided in (b) or (c) of this section, a trustee shall allocate to principal the proceeds of a life insurance policy or other contract in which the trust or its trustee is named as beneficiary, including a contract that insures the trust or its trustee ag…

Notwithstanding the other provisions of this chapter, if a charitable remainder unitrust, as defined in 26 U.S.C. 664 (Internal Revenue Code), owns an obligation described in (2) of this section, the following rules apply, unless varied by the governing instrument: (1) an obligat…

If a trustee determines that an allocation between principal and income required by AS 13.38.690, 13.38.700, 13.38.710, 13.38.720, or 13.38.750 is insubstantial, the trustee may allocate the entire amount to principal unless one of the circumstances described in AS 13.38.210(c) a…

(a) A trustee shall allocate (1) to income that portion of a payment that equals the greater of the following: (A) the portion that the payor characterizes as interest, a dividend, a remittance in place of interest, or a remittance in place of a dividend; or (B) the portion that …

(a) A trustee shall allocate 10 percent of the receipts from a liquidating asset to income and the balance to principal. (b) In this section, “liquidating asset” (1) means (A) an asset the value of which will diminish or terminate because the asset is expected to produce receipts…

(a) To the extent that a trustee accounts for receipts from an interest in minerals or other natural resources under this section, the trustee shall allocate them as follows: (1) if received as nominal delay rent or nominal annual rent on a lease, a receipt shall be allocated to …

(a) To the extent that a trustee accounts for receipts from the sale of timber and related products under this section, the trustee shall allocate the net receipts (1) to income, to the extent that the amount of timber removed from the land does not exceed the rate of growth of t…

(a) If a federal estate or gift tax marital deduction is allowed for all or part of a trust whose income is required to be paid to the settlor's or testator's spouse and whose assets consist substantially of property that does not provide the spouse with sufficient income from or…

(a) To the extent that a trustee does not account under AS 13.38.620 for transactions in derivatives, the trustee shall allocate receipts from and disbursements made in connection with those transactions to principal. (b) If a trustee grants an option to buy property from the tru…

(a) If a trust receives a payment from interest or other current return and from other proceeds of the collateral financial assets, the trustee shall allocate the portion of the payment that the payor identifies as being from interest or other current return to income, and the tr…

A trustee shall make the following disbursements from income: (1) interest, except interest on taxes described in AS 13.38.810(a)(7); (2) ordinary repairs; (3) real estate and other regularly recurring taxes assessed against principal; (4) recurring premiums on fire or other insu…

(a) A trustee shall make the following disbursements from principal: (1) extraordinary expenses incurred in connection with the administration, management, or preservation of trust property and the distribution of income; (2) extraordinary repairs; (3) compensation for legal serv…

Subject to AS 13.38.800 and 13.38.810, a trustee may, in the trustee's discretion, allocate to income or principal or partly to each ordinary expenses incurred in connection with the administration, management, or preservation of trust property and the distribution of income, inc…

(a) A trustee may transfer to principal a reasonable amount of the net cash receipts from a principal asset that is subject to depreciation. However, a trustee may not transfer any amount for depreciation (1) of that portion of real property used or available for use by a benefic…

(a) A trustee may transfer an appropriate amount from income to principal in one or more accounting periods to reimburse principal or to provide a reserve for future disbursements if the trustee makes or expects to make a disbursement from principal that is allocable to income un…